Nearly half of Americans would have trouble covering an emergency $400 expense, according to a new survey released Wednesday by the Federal Reserve.
Forty-six percent of respondents said that, if they suddenly were faced with an emergency requiring $400, they either could not pay it or would have to cover it by selling something or borrowing money.
Minorities have even less in the way of rainy day funds. Only 38 percent of Hispanics and 36 percent of black respondents said that they would cover the hypothetical $400 expense with cash.
While alarming, those results are a slightly improvement from last year, when 47 percent said they’d have trouble coming up with the $400.
The report’s findings suggest that, overall, U.S. families are doing better as the economic recovery stretches into a seventh year. Fully 69 percent of respondents said that they were “living comfortably” or “doing OK,” up 6 percentage points from 2013.
But some aspects of the report, such as the indications that many people don’t have savings even for emergencies and that one in five people are working multiple jobs, suggest that a lot of families still face financial difficulty.
“It’s important to identify the reasons why so many families face continued financial struggles and to find ways to help them overcome them,” said Lael Brainard, a member of the Fed’s Board of Governors.
Of the people surveyed, 31 percent responded that they were “finding it difficult to get by” or “just getting by,” in the Fed’s survey, an annual report released for the third time. That translates to 76 million adults who are struggling to get by.
One of the major financial risks facing U.S. families is that of a health care emergency. More than one in five respondents said that they incurred a major medical expense for which they had to pay out of pocket the previous year. Nearly half of those people had debt or unpaid balances left over from the surprise medical costs, which averaged $2,782.
The results come from an online survey of 5,695 households, adjusted to match the characteristics of the sample to the Census Bureau’s household survey to make the results reflective of the broader U.S. population.
